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Infosys's brief stint with hardware

During the 80s, Infosys had briefly (and unsuccessfully) dabbled in the hardware business.

| ET Bureau | Updated: Jul 20, 2015, 03:52PM IST

Infosys Digital Systems rolled out two products. One was the first electronic telex machines to come out from ... Read More

BENGALURU: Its global delivery model is what earned Infosys its stripes, helping it become the cynosure of Indian IT during the dotcom era and embody the Indian middle-class dream through the 90s and 2000s.

What is not widely known is the fact that during the 80s, India's second-biggest outsourcing company had also briefly (and unsuccessfully) dabbled in the hardware business. Infosys also had a hardware product — we withdrew from that space very early on," said Infosys cofounder Kris Gopalakrishnan during an ET tech Meetup on Friday.

"In 1985, we developed a replacement for the telex machine using a PC — an electronic telex machine," he said. "We also developed message switches for post and telegraph for re-routing telexes and telegrams." Around 1985, Infosys created two separate business units to tap into the hardware opportunity — Infosys Digital Systems and Infosys Manufacturing Systems.

Infosys Digital Systems rolled out two products. One was the first electronic telex machines to come out from India and the other was electronic keyboard and keyboard concentrator for the Indian post and telegraph network. "It was in use till recently," said Gopalakrishnan. "Recently the announcement came that the last telegram has been sent. Those telegrams were routed by the switch that we had developed in 1987-89 — we withdrew from that space in 89-90," he said. Infosys founder NR Narayana Murthy himself was involved in the designing of the concentrator, while cofounder and former CEO Nandan Nilekani served as the first managing director for the hardware business.

Shortly afterwards, Nilekani moved on to a different project and Gopalakrishnan took over the running of the hardware division, after having served as the chief architect of the business prior to that.

Another separate division called Infosys Manufacturing Systems produced what were known as numerical control machines and systems. The division was also selling programs for those systems. DN Prahlad, a former Infosys executive who was the chief architect of the concentrator, said the telex machine was sold primarily to the private sector. "We were very good at telex machines but then telexes went out of fashion. The product became obsolete," he said.

Infosys Digital Systems witnessed success early on when the unit managed to bag an order worth Rs 2-3 crore from the department of telecom. However, that success was short lived. And a few years later, Infosys sold off Digital Systems to a private firm.

"We sold that business to a private company, because we felt that it was challenging to sell something in India in the hardware space, especially when the customer is the government," said Gopalakrishnan. Infosys is not the only Indian outsourcing firm to have thrown its hat into the hardware ring. Others such as crosstown adversary Wipro and smaller peer Mindtree have also tried their luck with hardware businesses, before eventually exiting that space.

For now, the likes of Gopalakrishnan are trying hard to solve India's hardware manufacturing challenge and planning to set up a finishing school of sorts that will mentor and help hardwarefocused startups.

"There is one more initiative that I'm very excited about," Gopalakrishnan said. "It's to create a finishing school for hardware designers and hardware engineers and a lab for prototyping. It's not (just about) the physical facility but you'll have mentors who have done it and built things and can help out," he said.

A right decision taken at a right time took the company to great heights...

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